Is a 15/15 ARM the key to unlocking home ownership?
The real estate market fluctuates, going up or down depending on the season or other factors. The market has been hot, but recently economists at Realtor.com predict a balanced market is on the horizon.
Balanced? A balanced market provides stable home prices (good for sellers) as well as sufficient inventory (good for buyers). That’s encouraging news. But taking out a mortgage is still a big decision. With more than one lending option, which is right for you?
Conventional? Fixed-rate? First-time homebuyer? What about an adjustable-rate mortgage (ARM)? * With a 15/15 ARM, the interest rate is fixed for 15 years, adjusts once and then remains at that new interest rate for the remaining life of the loan.
What are the benefits? With a 15/15 ARM, you’ll experience a lower rate for the first 15 years than with a 30-year fixed rate mortgage. In a raising rate environment, a lower interest rate also means lower initial payments. You could enhance your buying power and afford more home than you thought possible.
Plus, if you don’t plan on staying in your home long-term, an ARM could be the right choice. According to the National Association of Realtors, the median duration of homeownership in the U.S. is 13 years. Whether you need more space, need to relocate or your needs simply change, you may make another move before your mortgage rate adjusts.
A 15/15 ARM may also make sense if you plan on making extra payments, since you’ll be able to pay down the loan principal and build equity faster. Or it could free up money to work toward other financial goals.
Remember, every situation is unique. A trusted mortgage professional, like those at Mortgage Solutions, LLC, a wholly owned subsidiary of Vantage, can help you understand your options and determine the right mortgage for you!
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* ARM loans are variable rate loans; interest rates and payments may increase after consummation. For example – 15/15ARM with a term of 30 years for $394,900, Initial Interest Rate of 4.875%, and an APR of 5.309%, your monthly payments for years 1 – 15 would be $2,089.84 and for years 16 -30 monthly payments could be a minimum of $2,107 to a maximum of $2,683 (based on the current Index Plus Margin). Monthly payments do not include taxes and insurance and the actual payment obligation will be greater. Payments are based on a 60-day lock period with a scenario assuming borrower has excellent credit of 740 or higher. Subject to credit approval.
Mortgage Solutions, LLC (NMLS #277481) is wholly owned subsidiary of Members Resource, LLC a Credit Union Service Organization wholly owned of Vantage Credit Union. Not all loan products or terms are available in all states. Missouri Residential Mortgage License; Illinois Residential Mortgage Licensee; Kansas Licensed Mortgage Company; Arkansas Licensed Mortgage Company. Mortgage Solutions, LLC dba Mortgage Solutions CU, LLC, Oklahoma Mortgage Lender. Equal Housing Lender.
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